Joe McGowan of Belmar tours his house, which suffered substantial damage during superstorm Sandy. A dispute with a contractor has left repairs unfinished. / DOUG HOOD/STAFF PHOTOGRAPHER

Joe McGowan of Belmar says a dispute with a contractor hired after superstorm Sandy flooded his Belmar home has left repairs unfinished. / DOUG HOOD/STAFF PHOTOGRAPHER

ADVICE FOR HIRING CONTRACTORS

Contact Consumer Affairs to see if consumers have filed any complaints against the contractor and to ensure the contractor is registered. • Get written estimates from at least three contractors. Ask the contractors how long they have been in business, if they have liability insurance (as required by law), and whether they will be using subcontractors on the project. • Do not pay for the entire job up front. The customary arrangement is one-third in advance, one-third halfway through the job and one-third upon completion. Do not pay with cash. • Make sure all warranties and guarantees are in writing, and that the contract states the name brands or quality/grades of materials to be used. • Before you sign a contract, ask for a lien waiver. A lien waiver is a receipt that states that the workers and material suppliers will not ask you for money once you have paid the contractor. Beware if a contractor asks you to sign a statement that says you will cover the costs of materials and labor if the contractor does not pay. • Ensure that all applicable construction permits are obtained from the local municipality. If you are applying for the permit yourself, provide the contractor’s name and license number on the permit application. Do not say that you are performing the work yourself if you are in fact using a contractor, as you may be forfeiting the protections afforded by law. If an electrician or plumber is doing the work, the municipal permit must be signed and sealed by the New Jersey-licensed electrical contractor or licensed master plumber. • Final inspections must be completed before final payment is made to the contractor. For information regarding inspections, see the notice printed in large type on the back of the construction permit. For more information: http://www.njconsumeraffairs.gov/brief/ improve.pdfSource: New Jersey Division of Consumer Affairs

Claire and Joe McGowan of Belmar felt forced to find a contractor quickly, competing with thousands of other Jersey Shore homeowners whose houses needed repairs because of superstorm Sandy. They thought they did all their homework.

They received a referral for a local contractor from a friend. They checked to see if the contractor — Michael Viola, operating as CADD Construction of Lake Como — was registered as a home improvement contractor with the state and whether there had been complaints. No red flags showed up.

But now they say they didn’t do enough. Viola took the full payment, but stopped work before he was halfway done, the McGowans say. Viola’s attorney says the decision to halt construction arose out of a dispute with the McGowans.

Watch the video above to hear the McGowans talk about the fallout from the contractor who they say walked out on them.

“We were panicked because we had two other contractors in here and they were too busy,” Joe McGowan said. “And people kept saying: mold, mold, mold. We had to do something before the mold set in. So we felt pressured to move. We got screwed.”

Dealing with contractors is a process freighted with uncertainty, even without natural disasters to negotiate. The state offers strong protections. But even with that in mind, the lesson the McGowans walked away with is that more homework is always better.

There are, of course, risks at both ends. Contractors sometimes are the ones shorted.

The McGowans’ complaint is not isolated.

Other Sandy victms at the Shore have filed complaints about contractors who have allegedly walked away with their money. The Monmouth County Prosecutor’s Office is cracking down, filtering these complaints through its Superstorm Sandy Fraud Task Force. Six Sandy contractors have been charged criminally.

Forty percent complete

The renovation of the McGowans’ home began on Dec. 22, almost two months after Sandy struck. They paid $67,000 to Viola for the initial contract and additional work. They estimate 40 percent of the project was completed when Viola stopped working after the final payment was made on May 6. The couple and one of their three adult children were due to move back in on June 21.

“We’ve been in limbo pretty much all summer,” Claire McGowan said in early September. They have been living in a relative’s vacant home in Spring Lake Heights since the storm.

Viola’s attorney, John P. Brennan of Avon, would not elaborate on what he called a dispute between Viola and the McGowans.

“We are prepared to proceed to arbitration at any time,” Brennan said in September, referring to an arbitration clause in the contract.

He did not respond to a call for additional comment Tuesday.

The McGowans have hired an attorney who is also preparing for arbitration, Joe McGowan said.

Damage to home

The McGowans’ home on Sixth Avenue in Belmar sits a few hundred feet from Silver Lake, which swelled during superstorm Sandy. The storm sent five feet of water from the lake and the rising sea into their street, and up to seven inches into the first floor of their 90-year-old home.

Those few inches of water were enough to do $70,000 worth of damage, according to their flood insurance company, which paid them that much, the McGowans said.

They contracted with CADD Construction to replace the old-fashioned plaster walls with drywall, install new wood trim, install a new subfloor and oak floor on the first floor, rewire the first floor, replace the corroded steam radiators with baseboard heat and install kitchen cabinets, a new front door and other items.

They set up a payment plan for about $5,460 a week for eight weeks under the first part of their contract and paid additional amounts on top of that. Joe McGowan, a certified public accountant, said he should have paid more attention to state guidelines that say final payments should not be made until the work is done.

A look at the home shows much work remains.

“There (are) sections not Sheetrocked, no baseboard heat, electrical outlets are in place but not wired,” Joe McGowan said. “He kept telling me we were 85 percent done. The biggest problem was that I trusted him as if he was a friend.”

After returning from vacation in July, Viola told the couple he had no more money and no more workers, the McGowans said.

Complaints are down

Despite the work needed because of the storm, complaints against home improvement contractors are down this year over last, said Jeff Lamm, spokesman for the state Division of Consumer Affairs. As of Tuesday, there have been 962 complaints against home improvement contractors. Last year, there were 1,444 in all.

Lamm suspects that Sandy has not produced more complaints because of delays in homeowners lining up funding.

“We were told if the contractor takes your money and so much as sticks a shovel in the ground, the case is not criminal,” Joe McGowan said.

Lamm said state or county consumer affairs offices can sue on behalf of complainants or the complainants can hire their own attorney. If they choose the latter and they win, they can receive triple damages, he said. But most consumers are on their own. The state division generally files suit only for a group of consumers, he said.

Laura Kirkpatrick, spokeswoman for Monmouth County, said the county’s Department of Consumer Affairs rarely files suit on behalf of consumers.

Other counties handle cases differently. The Middlesex County Consumer Affairs office files complaints for citizens more routinely, filing 18 so far this year, according to the office.

The state has a variety of tools at its disposal: the power of subpoena to squeeze records out of reluctant contractors, the ability to revoke a contractor’s registration or obtain a lien against assets or a contempt of court order if a judgment is won and the contractor fails to pay. That order can actually lead to jail time, Lamm said.

More protection for consumers could be on the way. A bill in the Legislature, introduced in June by state Sens. Jennifer Beck, R-Monmouth, and Fred Madden Jr., D-Camden and Gloucester, would require home-improvement contractors to carry bonds to guarantee work. Currently, they only need to carry liability insurance.

Lessons learned

But the division’s tools are there to clean up problems. There are other ways to prevent them. The McGowans know that well now. One thing they would have changed: Spend the time to check references.

“I think I would go to five to 10 properties that he did work on,” Joe McGowan said.

Andrew Wolf, a North Brunswick attorney who teaches consumer protection litigation at the Rutgers School of Law in Newark, offers the same advice.

“New Jersey has one of the strongest consumer protection statutes in the country,” Wolf said. “But you really have to vet contractors up front and make sure they’re from well-established businesses with a storefront or business address that you can visit. If you’re working with a fly-by-night contractor, there’s a good chance you’re not going to get your money back.”

And they would have been more cautious about the payment schedule. The state recommends paying a third of the money up front, a third when the job is half done and the balance when code officials approve the work.

“I think the general public is probably unaware of how bad it is,” Joe McGowan said.